Thursday, July 24, 2008

What Brands & Media Buyers Really Think About In-Game Advertising

In a special panel at Casual Connect casual game companies discussed the impact of in-game advertising and luring big brands to the growing space.

Moderator Mike Vann started by pointing out that advertising is not only in-game, but around games as well. The first statistic he cited was the 200 million players of casual games each month. "Trip [Hawkins of Digital Chocolate] believes that's going to be a billion – and we all hope he's right."

Vann said that 51.7 percent of casual gamers are female, 48.3 percent are male, and that the average age is 33. "It's growing 20% per year," he reported, adding that 67% of U.S. residents have played games in past three months.

"So casual games are here – people are playing – probably more than will admit it," Vann told the audience, adding that there was an amazing opportunity to "extract advertising value from all this growth."

"The ad supported model has definitely arrived," Vann proclaimed, showing a chart that predicts the ad spend for U.S. video games will grow from it's current half-a-billion dollars to $1 billion in 2012. "The numbers are promising, and we all need to pay attention to this revenue pool."

In that same timeframe, 84 percent of in-game advertising will be of the dynamic type.

"Once you get [brand marketers] in the door, and they can see the results, they fall in love with [casual games]."

Jordon Smith, an account executive at ESPN says her network has "identified the casual game area as a growth area for us." She points out that the core demographic of men aged 12-to-34 actually enjoy playing these casual titles. One recent title, Zoom had "over a million plays in two months – which was just phenomenal."

Meanwhile, Joe Keating, a media supervisor from Avenue A Razorfish, notes that developing a console game takes too long and has too much policy involved. "There's a lot that you can create and do in the casual game space," he says.

Keating cites the Zoom game having an average playtime of seven minutes per user, and that the casual games gave ESPN the flexibility to create something custom.

"Advertisers want reach, they want scale, they want to be able to go one or two places to reach a lot of people," states Ty Levine, the vice president of marketing for NeoEdge. He says that, in the ad community, the decision makers have been extremely positive.

But the challenge Levine finds is that the owners of those brands tend to be conservative, which requires education for them to become comfortable with game ads.

"Even though we do video advertising," he says, "At the end of the day you're wrestling with conversion" – something the Internet has been used for instead of the brand-building advertising that normally appears on television.

"Once you get them in the door, and they can see the results, they fall in love with it," says Levine, "if you can get over that first hurdle."

"We've been spending a lot of time with advertisers and agencies educating them on the data we have," adds Yahoo's Kyle Laughlin. But something he doesn't hear getting much attention is quality, which is something Yahoo finds to be a key factor.

"Any time brands are eager to cut quality," Laughlin finds himself encouraging them to work with good developers or publishers. Bad games don't work, "nor do they do the brand justice itself." Yahoo's reach, plus great games, he says, "is really paying off."

NeoEdge's Levine concludes that the unique part of in-game advertising is your connection to players. "In a game, you have an audience that's focused on that game." Outside the Hallmark channel, he says, "There are very few place you can own the 20-minute experience."